Energy buyers seeking fixed price agreements pursue the most favorable rates for their organizations. Timing the market is difficult, but setting budget goals and expectations can help predict a strike and ceiling price that meets your objectives.
Strike prices are your target rates. For example, if your firm would like to see a 10% budget reduction, you can set your strike price for 10% under your current fixed rate agreement. If the market achieves this strike price, you can elect to automatically lock it in or notify you of the ability to lock it in.
With the market moving on a dime, our team tracks the pricing daily to prevent missed opportunities.
Alternatively, ceiling prices limit your price risk exposure to rising markets. For instance, if your organization can only handle a 15% increase in your budget, a ceiling price will prevent the market from running up and exceeding your budgetary limits. While not ideal, this is a safety mechanism to ensure that price run-ups don’t blindside your energy budget.
Many clients utilize strike and ceiling prices to build a forward-looking procurement strategy that aligns with their goals. You are never required to lock all-in on one day of the market. Options include:
Building your fixed price over time can spread your risk, and dollar cost average your energy rate by the time the agreement begins.
Contact us to learn more about setting your strike and ceiling prices and how they can help your organization manage its energy spend appropriately.